exhibit_10-3.htm


     

     

     

     

     

    Exhibit 10.3

     

    EXECUTION VERSION

     

    TAX
ALLOCATION AGREEMENT dated as of August 4 2008 (this “Agreement”) among
Kraft Foods Inc., a Virginia corporation (“Parent”), Cable
Holdco, Inc., a newly organized Delaware corporation and direct wholly-owned
Subsidiary of KFG (“Splitco”) and Ralcorp
Holdings, Inc., a Missouri corporation (“RMT Partner”,
collectively, the “Companies”).  Capitalized
terms used in this Agreement are defined in Article I below or in the
RMT Transaction Agreement.

     

    WHEREAS,
as of the date of this Agreement, Parent is the common parent of an Affiliated
Group of corporations, including KFG and Splitco, which has elected to file
consolidated U.S. Federal income Tax Returns;

     

    WHEREAS,
the Companies have entered into the RMT Transaction Agreement, which sets forth
the corporate transactions pursuant to which:

     

    
      	
               
      

            	
              A.

            	
              at
      the time of, or prior to, the RMT Debt Incurrence, pursuant to the Newco
      Contribution, KFG shall transfer, or cause to be transferred, the U.S.
      Acquired Assets (excluding the Modesto Facility) and cash as set forth in
      the RMT Transaction Agreement to Newco in exchange for the assumption by
      Newco of the U.S. Assumed Liabilities (other than the RMT Debt) and,
      pursuant to the Modesto Purchase, Parent shall cause the Modesto Facility
      to be transferred to Newco in exchange for a cash payment and certain
      other consideration;

            


    

     

    
      	
               
      

            	
              B.

            	
              immediately
      prior to the Splitco Contribution, KFG shall incur the RMT Debt and
      receive the RMT Debt Proceeds pursuant to the RMT Debt
      Incurrence;

            


    

     

    
      	
               
      

            	
              C.

            	
              following
      the RMT Debt Incurrence, pursuant to the Splitco Contribution, Parent will
      cause KFG to contribute the limited liability company interests in Newco
      to Splitco in exchange for (i) the issuance by Splitco to KFG of the
      Splitco Securities, (ii) the issuance by Splitco to KFG of a certain
      number of shares of Splitco Common Stock pursuant to the Splitco Share
      Issuance and (iii) the assumption by Splitco of the RMT Debt;
    

            


    

     

    
      	
               
      

            	
              D.

            	
              immediately
      following the Splitco Contribution, the Splitco Share Issuance and the
      issuance of Splitco Securities, and prior to the Distribution, KFG shall
      distribute all the issued and outstanding shares of Splitco Common Stock
      held by KFG to Parent pursuant to the Internal
  Spin;

            


    

     

    
      	
               
      

            	
              E.

            	
              immediately
      following the Internal Spin, KFG shall consummate the Internal Debt
      Repayment by transferring the RMT Debt Proceeds to Parent in exchange for
      the retirement of outstanding intercompany
debt;

            


    

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    
      	
               
      

            	
              F.

            	
              immediately
      following the Internal Debt Repayment, KFG may consummate the Internal
      Debt Exchange by transferring the Splitco Securities to Parent in exchange
      for the retirement of outstanding intercompany
  debt;

            


    

     

    
      	
               
      

            	
              G.

            	
              following
      the Internal Spin, the Internal Debt Repayment and the Internal Debt
      Exchange, if applicable, and on the Distribution Date, Parent shall
      consummate the Distribution of the Splitco Common Stock to Eligible Parent
      Stockholders;

            


    

     

    
      	
               
      

            	
              H.

            	
              immediately
      following the Distribution, pursuant to the Splitco Merger, Splitco shall
      merge with and into Merger Sub, whereby each issued share of Splitco
      Common Stock shall be converted into the right to receive one fully paid
      and nonassessable share of RMT Partner Common
  Stock;

            


    

     

    
      	
               
      

            	
              I.

            	
              immediately
      following the Splitco Merger, pursuant to the Short Form Merger, the
      Splitco Merger Surviving Company shall merge with and into RMT
      Partner;

            


    

     

    
      	
               
      

            	
              J.

            	
              immediately
      following the Short Form Merger, pursuant to the Non-U.S. Transfers,
      Parent shall cause the Non-U.S. Transferors to sell and transfer the
      Non-U.S. Acquired Assets to the Non-U.S. Transferees, in exchange for the
      irrevocable assumption by the Non-U.S. Transferees of the Non-U.S. Assumed
      Liabilities and certain other consideration;
and

            


    

     

    
      	
               
      

            	
              K.

            	
              on
      or following the Distribution Date, Parent may cause the External Debt
      Exchange to be effected;

            


    

     

    WHEREAS,
the parties intend the Proposed Transactions to qualify for the Intended
Tax-Free Treatment;

     

    WHEREAS,
as a result of the Distribution, Splitco and its Subsidiaries will cease to be
members of the Parent Group;

     

    WHEREAS,
the Companies desire to allocate among the Companies the Tax responsibilities,
liabilities and benefits of transactions arising prior to, as a result of, and
subsequent to the Proposed Transactions, and to provide for and agree upon other
matters relating to Taxes; and

     

    NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the Companies (each on behalf of itself, each of its Affiliates, and its
future Affiliates) hereby agree as follows:

     

     

     

     

    
      
        
        

      

      
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    ARTICLE
I

     

    Definitions

     

    SECTION
1.01  Definition of Terms.  The following terms shall have
the following meanings (such meanings to apply equally to both the singular and
the plural forms of the terms defined).  All section and Exhibit
references are to this Agreement unless otherwise stated.

     

    “Acquired Assets” has
the meaning set forth in the RMT Transaction Agreement.

     

    “Active Trade or
Business” means the active conduct by Splitco of the businesses conducted
by the members of the Splitco Group as of the Distribution (determined in
accordance with Code Section 355(b)).

     

    “Affiliate” of any
person means another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first person.  For purposes of this definition, “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person, whether through ownership
of voting securities, by contract or otherwise.

     

    “Affiliated Group”
means an affiliated group as that term is defined in Section 1504(a) of the
Code.

     

    “Agreement” has the
meaning set forth in the preamble.

     

    “Business Employees”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Closing Date” has the
meaning set forth in the RMT Transaction Agreement.

     

    “Code” has the meaning
set forth in the RMT Transaction Agreement.

     

    “Collateral
Agreements” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Companies” has the
meaning set forth in the preamble.

     

    “Consolidated or Combined
State Income Tax” means any State Income Tax computed on a consolidated,
combined or unitary basis.

     

    “Consolidated or Combined
State Income Tax Return” means any Tax Return relating to Consolidated or
Combined State Income Tax.

     

     

     

     

    
      
        
        

      

      
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    “Contribution” has the
meaning set forth in the RMT Transaction Agreement.

     

    “Distribution” has the
meaning set forth in the RMT Transaction Agreement.

     

    “Distribution Date”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Eligible Parent
Stockholders” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Employee Equity
Grants” has the meaning set forth in Section 4.01(c)(i).

     

    “External Debt
Exchange” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Federal Consolidated
Return” means any U.S. Federal Tax Return for an Affiliated
Group.

     

    “Final Determination”
means the final resolution of liability for any Tax for any taxable period by or
as a result of (i) a final and unappealable decision, judgment, decree or
other order by any court of competent jurisdiction; (ii) a final settlement
with the IRS, a closing agreement or accepted offer in compromise under Code
Sections 7121 or 7122, or a comparable arrangement under the laws of
another jurisdiction; (iii) any allowance of a refund in respect of an
overpayment of Tax, but only after the expiration of all periods during which
such amount may be recovered by the Taxing Authority imposing the Tax; or
(iv) any other final disposition, including by reason of the expiration of
the applicable statute of limitations.

     

    “Group” means the
Parent Group or the Splitco Group, or both, as the context
requires.

     

    “Indemnitee” has the
meaning set forth in Section 5.01.

     

    “Indemnifying Party”
has the meaning set forth in Section 5.01.

     

    “Intended Tax-Free
Treatment” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Internal Debt
Exchange” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Internal Debt
Repayment” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Internal Spin” has
the meaning set forth in the RMT Transaction Agreement.

     

     

     

     

    
      
        
        

      

      
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    “IRS” means the U.S.
Internal Revenue Service.

     

    “IRS Ruling” has the
meaning set forth in the RMT Transaction Agreement.

     

    “KFG” has the meaning
set forth in the RMT Transaction Agreement.

     

    “Merger Sub” has the
meaning set forth in the RMT Transaction Agreement.

     

    “Mergers” has the
meaning set forth in the RMT Transaction Agreement.

     

    “Modesto Facility” has
the meaning set forth in the RMT Transaction Agreement.

     

    “Modesto Purchase” has
the meaning set forth in the RMT Transaction Agreement.

     

    “Newco” has the
meaning set forth in the RMT Transaction Agreement.

     

    “Newco Contribution”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Non-U.S. Acquired
Assets” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Non-U.S. Assumed
Liabilities” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Non-U.S. Transfer”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Non-U.S. Transferees”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Non-U.S. Transferors”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Parent” has the
meaning set forth in the preamble.

     

    “Parent Deferred Stock
Awards” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Parent Group” means
the Affiliated Group of which Parent is the common parent.  The Parent
Group shall include Splitco and other members of the Splitco Group only for
taxable periods ending on or before the Distribution Date.

     

    “Parent Group Federal
Consolidated Return” means any Federal Consolidated Return for the Parent
Group.

     

     

     

     

    
      
        
        

      

      
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    “Past Practices” has
the meaning set forth in Section 3.03(a).

     

    “Planned Acquisitions”
has the meaning set forth in Section 4.02(c)(ii).

     

    “Post-Distribution
Period” means any taxable period (or portion thereof) beginning after the
Distribution Date.

     

    “Pre-Distribution
Period” means any taxable period (or portion thereof) ending on or before
the Distribution Date.

     

    “Prohibited Act” has
the meaning set forth in Section 4.02(c).

     

    “Property Taxes” means
real, personal and intangible property Taxes.

     

    “Proposed
Transactions” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Recoverable Taxes”
has the meaning set forth in Section 2.03.

     

    “Related Persons” has
the meaning set forth in Section 4.01(d)(iii).

     

    “Responsible Party”
means, with respect to any Tax Return, the party having responsibility for
preparing and filing such Tax Return under this Agreement.

     

    “Restricted Period”
means the two-year period commencing on the day following the Distribution
Date.

     

    “RMT Debt” has the
meaning set forth in the RMT Transaction Agreement.

     

    “RMT Debt Incurrence”
has the meaning set forth in the RMT Transaction Agreement.

     

    “RMT Debt Proceeds”
has the meaning set forth in the RMT Transaction Agreement.

     

    “RMT Partner” has the
meaning set forth in the preamble.

     

    “RMT Partner Canada”
has the meaning set forth in the RMT Transaction Agreement.

     

    “RMT Partner Common
Stock” has the meaning set forth in the RMT Transaction
Agreement.

     

    “RMT Transaction
Agreement” means the RMT Transaction Agreement, as amended from time to
time, by and among Parent, Splitco, RMT Partner and Merger Sub, dated as of
November 15, 2007.

     

     

     

     

    
      
        
        

      

      
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    “Ruling” means all
private letter rulings (including the IRS Ruling) granted by the IRS relating to
the Proposed Transactions (whether granted prior to, on or after the date
hereof), requests for such rulings, including all supplemental ruling requests
and information submissions, and any exhibit to any of the
foregoing.

     

    “Short Form Merger”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Spin-off” has the
meaning set forth in the RMT Transaction Agreement.

     

    “Splitco” has the
meaning set forth in the preamble.

     

    “Splitco Capital
Stock” means (i) all classes of stock of Splitco, Merger Sub or
RMT Partner, as the case may be, including common stock and all other
instruments treated as equity in Splitco, Merger Sub or RMT Partner, as the case
may be, for U.S. Federal income tax purposes and (ii) all options, warrants
and other rights to acquire such stock.  If Splitco, Merger Sub or RMT
Partner merges into another entity or consolidates with another entity to form a
new entity, Splitco Capital Stock shall refer to the capital stock of such new
entity.

     

    “Splitco Carryback”
means any net operating loss, net capital loss, excess Tax credit or other
similar Tax item of any member of the Splitco Group that may or must be carried
from one taxable period to a prior taxable period under applicable tax
law.

     

    “Splitco Common Stock”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Splitco Contribution”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Splitco Group” means
Splitco and each entity that is a Subsidiary of Splitco on the Distribution
Date.

     

    “Splitco Merger” has
the meaning set forth in the RMT Transaction Agreement.

     

    “Splitco Merger Surviving
Company” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Splitco Securities”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Splitco Share
Issuance” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Split-off” has the
meaning set forth in the RMT Transaction Agreement.

     

     

     

     

    
      
        
        

      

      
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    “State Income Tax”
means any Tax imposed by any state of the United States or by any political
subdivision of any such state which is imposed on or measured by net income,
including state and local franchise or similar Taxes measured by net
income.

     

    “Straddle Period”
means any taxable period that begins on or before and ends after the
Distribution Date.

     

    “Subsidiary” of any
person means, at any date, any corporation, partnership, joint venture or other
entity of which the applicable person owns, directly or indirectly, more than
50% of the outstanding voting securities or equity interests.

     

    “Supplemental Ruling”
means a Ruling to the effect that a Prohibited Act would not adversely affect
any of the conclusions with respect to the Intended Tax-Free Treatment set forth
in the original Ruling.

     

    “Supplemental Tax
Opinion” means a tax opinion to the effect that a Prohibited Act would
not adversely affect any of the conclusions with respect to the Intended
Tax-Free Treatment set forth in any Ruling or any other Tax Opinion (including
any other Supplemental Tax Opinion or Supplemental Ruling).

     

    “TAA Dispute” means
any dispute arising in connection with this Agreement.

     

    “Tax Representations”
has the meaning set forth in the RMT Transaction Agreement.

     

    “Taxes” means any tax,
wherever created or imposed, and whether of the United States or elsewhere, and
whether imposed by a Taxing Authority or by contract, and, without limiting the
generality of the foregoing, shall include income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, unemployment
insurance, social security, stamp, environmental, value added, alternative or
added minimum, ad valorem, trade, recording, withholding, occupation or transfer
tax, custom or duty or other like governmental assessment or charge of any kind
whatsoever, together with any related interest, penalties and additions imposed
by any Taxing Authority or by contract.

     

    “Tax Advisor” means a
U.S. tax counsel of recognized national standing reasonably acceptable to both
parties.

     

    “Tax Benefit” means
any item of loss, deduction, credit, refund or any other Tax Item that decreases
Taxes paid or payable.  Tax Benefits are to be determined using the
assumption that each party pays Federal, state, local and foreign Tax at the
highest applicable marginal corporate Tax rate and can fully utilize any
available Tax Benefits.

     

     

     

     

    
      
        
        

      

      
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    “Tax Contest” means an
audit, review, examination or any other administrative or judicial proceeding
with the purpose or effect of determining or redetermining Taxes.

     

    “Tax Detriment” means
any item of income, gain, recapture of credit or any other Tax Item that
increases Taxes paid or payable.

     

    “Tax Item” means, with
respect to any income Tax, any item of income, gain, loss, deduction and
credit.

     

    “Tax Loss” means the
increase in Tax paid or payable to the relevant Taxing Authority (or, without
duplication, the reduction in any Tax Benefit) attributable to a Tax
Detriment.

     

    “Tax Opinion” means
the opinions of Tax Advisors relating to the Proposed Transactions, including
those issued at the time of the Distribution.

     

    “Tax Return” or “Return” means any
return, filing, report, questionnaire, information statement, claim for refund,
or other document required or permitted to be filed, including any amendments
that may be filed, for any taxable period with any Taxing
Authority.

     

    “Taxing Authority”
means any governmental authority imposing Taxes.

     

    “Transaction Taxes”
means all (i) Taxes of any member of the Parent Group or the Splitco Group
resulting from, or arising in connection with, the failure of the Proposed
Transactions to have the Intended Tax-Free Treatment, (ii) Taxes of the
type described in clause (i) of any third party for which any member of the
Parent Group or the Splitco Group is or becomes liable, and
(iii) reasonable out of pocket legal, accounting and other advisory and
court fees in connection with liability for Taxes described in clauses (i)
or (ii).  For the avoidance of doubt, “Transaction Taxes” does
not include Transfer Taxes.

     

    “Transfer Tax Return”
means any Tax Return for Transfer Taxes.

     

    “Transfer Taxes” has
the meaning set forth in Section 2.03.

     

    “U.S. Acquired Assets”
has the meaning set forth in the RMT Transaction Agreement.

     

    “U.S. Assumed
Liabilities” has the meaning set forth in the RMT Transaction
Agreement.

     

    “Worksheet” has the
meaning set forth in Section 4.01(c)(i).

     

     

     

     

    
      
        
        

      

      
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    ARTICLE
II

     

    Payment of
Taxes

     

    SECTION
2.01  Pre-Distribution/Post-Distribution
Taxes.  (a) Except as provided in Sections 2.01(f), 2.02 and
2.03, Parent shall indemnify and hold harmless RMT Partner, Splitco and each
member of the Splitco Group from and against (i) all Taxes of the Parent
Group (including, for all Pre-Distribution Periods, each member of the Splitco
Group and the portion of any Taxes for a Straddle Period that are allocated to
the Pre-Distribution Period pursuant to Section 2.01(c) below) and (ii) all
Taxes of any affiliated, consolidated, combined or unitary group of which
Splitco or any member of Splitco Group was a member before the Distribution
Date, including pursuant to Treas. Reg. 1.1502-6 or analogous or similar
state, local or foreign law or regulation.

     

    (b)  Except
as provided in Sections 2.01(a), 2.01(e), 2.02 and 2.03, RMT Partner and
Splitco shall indemnify and hold harmless Parent and each member of the Parent
Group from and against (i) all Taxes of the Splitco Group for any
Post-Distribution Period (including the portion of any Taxes for a Straddle
Period that are allocated to the Post-Distribution Period pursuant to Section
2.01(c) below) and (ii) any Tax Losses that result from the failure by RMT
Partner, Splitco or any member of the Splitco Group to use a consistent position
as provided in Section 3.03 (without regard to whether Parent’s written
consent was obtained).  For the avoidance of doubt, RMT Partner and
Splitco shall have no obligation to indemnify and hold harmless Parent or any
member of the Parent Group pursuant to this Section 2.01(b) with respect to any
Taxes arising from any action by RMT Partner or Splitco expressly required by
the RMT Transaction Agreement.

     

    (c)  In
the case of any Straddle Period (i) Property Taxes and related exemptions,
allowances or deductions that are calculated on an annualized basis shall be
apportioned between the Pre-Distribution Period and the Post-Distribution Period
on a daily pro-rata basis and (ii) all other Taxes and related items shall
be apportioned between the Pre-Distribution Period and the Post-Distribution
Period on a closing of the books basis as of the close of business on the
Distribution Date.

     

    (d)  The
amount or economic benefit of any Tax Benefit of any member of the Splitco Group
(i) arising in any Pre-Distribution Period shall be for the account of the
Parent Group, (ii) arising in any Post-Distribution Period shall be for the
account of the Splitco Group and (iii) arising in any Straddle Period shall
be apportioned between the Pre-Distribution Period and the Post-Distribution
Period pursuant to the principles set forth in Section 2.01(c)
above.  For the avoidance of doubt, the amount or economic benefit of
any deductions with respect to the exercise of Parent stock options or other
stock awards held by the Business Employees as of the Distribution Date shall be
treated as arising in the Pre-Distribution Period, regardless of the date on
which such stock options or other awards are exercised, and such treatment shall
not result in a Tax indemnification obligation of RMT Partner or
Splitco.  Any wage or payroll withholding Taxes attributable to the
exercise or vesting of Parent’s stock options or other stock awards shall be the
sole responsibility of Parent.

     

     

     

     

    
      
        
        

      

      
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    (e)  Other Income
Taxes.  For the avoidance of doubt, any Tax Item resulting from
Splitco ceasing to be a member of the Parent Group (including any Tax Items
required to be taken into account by the Parent Group under Treas. Reg. §§
1.1502-13 and 1.1502-19) shall be treated as arising in the
Pre-Distribution Period.

     

    (f)  Except
as provided in Sections 2.01(e) (Other Income Taxes), 2.02 (Transaction Taxes)
and 2.03 (Transfer Taxes), which Taxes, for the avoidance of doubt, are provided
for exclusively in such sections, RMT Partner and Splitco shall indemnify and
hold harmless Parent and each member of the Parent Group from and against Taxes
of Parent or any member of the Parent Group imposed as a result of actions taken
by, or at the direction of, RMT Partner or the Splitco Group on the Distribution
Date but following the Distribution, other than actions by RMT Partner and
Splitco expressly required by the RMT Transaction Agreement.

     

    SECTION
2.02  Transaction
Taxes.  (a) Parent shall indemnify and hold harmless RMT
Partner, Splitco and each member of the Splitco Group from and against any
Transaction Taxes other than those described in Section 2.02(b).  For
the avoidance of doubt, Parent shall indemnify and hold harmless RMT Partner,
Splitco and each member of the Splitco Group from and against (i) any
Transaction Taxes attributable to the distribution by Parent of Splitco Common
Stock to holders of Parent Deferred Stock Awards and (ii) any Transaction Taxes
in connection with the Merger that are directly attributable to any actions
undertaken pursuant to and described in the “Accounting Cut-Off Matters” and
“Inventory” sections of the letter agreement entitled “Re: Allocation
Agreement”, dated August 4, 2008, between Parent and RMT Partner.

     

    (b)  RMT
Partner and Splitco shall indemnify and hold harmless Parent and each member of
the Parent Group from and against any Transaction Taxes that are attributable
to:

     

    (i)  other
than Transaction Taxes attributable to actions by RMT Partner and Splitco
expressly required by the RMT Transaction Agreement:

     

    (A)  any
inaccurate representation made in Sections 4.01(b), 4.01(c) or
4.01(d);

     

    (B)  any
inaccurate statement of fact or inaccurate Tax Representation (or omission to
state a material fact, the omission of which causes the facts stated or Tax
Representations made not to be complete and accurate in all material respects)
made by RMT Partner in a letter or certificate that forms the basis for any Tax
Opinion or Ruling;

     

    (C)  any
action or failure to take action by RMT Partner, the Splitco Group (taken at the
direction of RMT Partner) or any of their Affiliates, after the date of the RMT
Transaction Agreement until the Distribution Date, that violates the covenants
made by RMT Partner or Splitco set forth in this Agreement; or

     

    (D)  any
other action or failure to take action (including Prohibited Acts) by RMT
Partner, the Splitco Group or any of their Affiliates after the Distribution
Date that violates the covenants made by RMT Partner or Splitco set forth in
this Agreement.

     

     

     

     

    
      
        
        

      

      
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    (ii)  the
failure of the Mergers to qualify for the Intended Tax-Free Treatment, except
where such failure is a result of a breach of a Tax Representation or covenant
by Parent; provided, however,
(A) RMT Partner and Splitco shall have no liability under this Section
2.02(b)(ii) with respect to or as a result of any deemed sale of Splitco Common
Stock attributable to such stock being treated for Federal income tax purposes
as not having been distributed to the stockholders of Parent or any resulting
failure by Parent to distribute an amount of Splitco Common Stock constituting
“control” of Splitco within the meaning of Section 368(c) of the Code, and (B)
RMT Partner and Splitco shall have no liability under this Section 2.02(b)(ii)
with respect to the failure of the Splitco Merger to qualify for the Intended
Tax-Free Treatment if Splitco is the surviving entity in the Splitco
Merger.

     

    For the
avoidance of doubt, Parent's right to be indemnified and held harmless under
this Section 2.02(b) shall be determined without regard to whether a
written waiver from Parent, a Supplemental Ruling or a Supplemental Opinion was
obtained under Sections 4.02(d) or 4.02(f).

     

    (c)  The
party responsible for any Transaction Taxes under Sections 2.02(a) or 2.02(b),
as the case may be, shall be entitled to the economic benefit of any Tax
Benefits of such Transaction Taxes.

     

    SECTION
2.03  Transfer
Taxes.  RMT Partner and Splitco shall be liable and shall
indemnify Parent and each member of the Parent Group for any value-added, sales
or other Taxes incurred in connection with the Non-U.S. Transfers or the
Proposed Transactions (including transactions undertaken before the Contribution
for the purpose of facilitating the Proposed Transactions) that would be
recoverable (whether or not actually recovered) by RMT Partner, RMT Partner
Canada or any member of the Splitco Group under applicable laws (including
Canadian federal goods and services tax (“GST”), harmonized sales tax (“HST”),
Quebec sales tax (“QST”) and Canadian Provincial sales tax (“PST”)) (“Recoverable
Taxes”).  All other stamp, sales, use, gross receipts,
value-added, real estate transfer or other transfer Taxes incurred in connection
with the Non-U.S. Transfers or the Proposed Transactions (including transactions
undertaken before the Contribution for the purpose of facilitating the Proposed
Transactions) (such Taxes, together with any interest, penalties or additions to
such Taxes, “Transfer
Taxes”) shall be shared equally by Parent, on the one hand, and RMT
Partner and Splitco, on the other hand.  For the avoidance of doubt,
Transfer Taxes shall not include Taxes on or measured by net
income.

     

     

     

     

    
      
        
        

      

      
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    ARTICLE
III

     

    Preparation and Filing of
Tax Returns

     

    SECTION
3.01  Parent
Responsibility.  Except as provided in Section 3.04,
Parent shall make all determinations with respect to, have ultimate control over
the preparation of, and file (i) all Parent Group Federal Consolidated
Returns for all taxable periods, (ii) all Consolidated or Combined State
Income Tax Returns for any taxable period that includes one or more members of
the Parent Group for all Pre-Distribution Periods, (iii) all other Returns
with respect to the Acquired Assets for all Pre-Distribution Periods and
(iv) all Transfer Tax Returns.

     

    SECTION
3.02  Splitco
Responsibility.  Except as provided in Sections 3.01, 3.04
and 3.05, RMT Partner and Splitco shall make all determinations with respect to,
have ultimate control over the preparation of, and file (i) all Returns for
all taxable periods that include one or more members of the Splitco Group,
(ii) subject to Section 3.03, all Returns for all Straddle Periods
that include one or more members of the Splitco Group (“Straddle Period
Return”) and (iii) any Returns for Recoverable Taxes.

     

    SECTION
3.03  Tax
Accounting Practices.  (a) Except as provided in
Section 3.03(b), any Tax Return for any Pre-Distribution Period or any
Straddle Period, and any Tax Return for any Post-Distribution Period to the
extent Tax Items reported on such Tax Return may reasonably affect Tax Items
reported on any Tax Return for any Pre-Distribution Period or any Straddle
Period, in each case to the extent relating to the Acquired Assets, shall be
prepared in a manner not inconsistent with practices, accounting methods,
elections and conventions used with respect to such Tax Return, or with respect
to the Acquired Assets, for periods prior to the Distribution (“Past Practices”),
and, in the case of any item the treatment of which is not addressed by Past
Practices, in accordance with generally acceptable tax accounting
practices.  Notwithstanding the foregoing, for any Tax Return
described in the preceding sentence, RMT Partner and Splitco may take a position
inconsistent with such Past Practices with the written consent of Parent (not to
be unreasonably withheld) subject to Section 2.01(b).

     

    (b)  The
parties shall report the Proposed Transactions for all tax purposes in a manner
consistent with the factual statements, representations and conclusions with
respect to matters of law set forth in the Tax Opinions and Rulings (including
any Supplemental Tax Opinion or Supplemental Ruling), unless, and then only to
the extent, an alternative position is required pursuant to a Final
Determination.  

     

    SECTION
3.04  Right
to Review Tax Returns.  The Responsible Party with respect to
any Tax Return shall make such Tax Return or portions thereof and related
workpapers available for review upon request by the other party and shall
consider the reasonable comments made by such other party to the extent
(i) such Tax Return relates to Taxes for which the requesting party may be
liable or (ii) such Tax Return relates to Taxes for which the requesting
party may be liable in whole or in part for any additional Taxes owing as a
result of adjustments to the amount of Taxes reported on such Tax
Return.  The parties shall attempt in good faith to resolve any issues
arising out of the review of such Tax Returns.

     

     

     

     

    
      
        
        

      

      
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      SECTION
3.05  Amended
Returns.  Except with the written consent of Parent (not to be
unreasonably withheld) and except as provided in Section 3.06, neither RMT
Partner nor Splitco shall amend any Tax Return described in Section 3.01, unless
required by law.

       

      SECTION
3.06  Splitco Waivers of
Carrybacks.  To the extent permissible by the applicable tax
law, Splitco shall cause each member of the Splitco Group to waive the right to
claim any Splitco Carryback to any Pre-Distribution Period with respect to any
Federal Consolidated Return or Consolidated or Combined State Income Tax
Return.

       

    

    ARTICLE
IV


     

    Representations and
Covenants

     

    SECTION
4.01  Representations.  (a)
As of the Distribution Date, Parent represents that (i) it knows of no fact
(other than the facts disclosed in any Ruling request submitted prior to the
date hereof), reason or circumstance that may cause the Proposed Transactions to
fail to have the Intended Tax-Free Treatment and (ii) it has no plan or
intention to take any action inconsistent with the factual statements or Tax
Representations in the Tax Opinions or Ruling, any letter or certificate that
forms the basis therefor or the covenants set forth in this
Agreement.

     

    (b)  As
of the Distribution Date, RMT Partner represents that (i) it knows of no
fact (other than facts disclosed in any Ruling request submitted prior to the
date hereof), reason or circumstance that may cause the Proposed Transactions to
fail to have the Intended Tax-Free Treatment and (ii) it has no plan or
intention to take any action inconsistent with the factual statements or Tax
Representations in the Tax Opinions or Ruling, any letter or certificate that
forms the basis therefor or the covenants set forth in this
Agreement.

     

    (c)  As
of the date of the RMT Transaction Agreement, RMT Partner
represents:

     

    (i)  The
“Outstanding” column of the RMT Partner Share Count Worksheet (the “Worksheet”) attached
hereto as Exhibit A identifies the number of shares of all classes of RMT
Partner's capital stock (A) outstanding as of the date of the RMT Transaction
Agreement and not subject to a risk of forfeiture (labeled “Outstanding Common
Stock” in the Worksheet), (B) outstanding as of the date of the RMT Transaction
Agreement and subject to a risk of forfeiture (labeled “Restricted Stock” in the
Worksheet), (C) issuable by RMT Partner upon the exercise of options outstanding
as of the date of the RMT Transaction Agreement (assuming such options are
exercised by payment of the exercise price and not through “cashless exercise”)
(labeled “Options” in the Worksheet), (D) issuable pursuant to deferred
compensation plans as of the date of the RMT Transaction Agreement (labeled
“Stock Issuable Pursuant to Deferred Compensation Plans” in the Worksheet) and
(E) underlying stock appreciation rights (labeled “Stock Appreciation Rights” in
the worksheet) outstanding as of the date of the RMT Transaction Agreement (the
items in clauses (B) through (E), together with clauses (B) through (E) of
subparagraph (ii) below, “Employee Equity
Grants”). The Worksheet is true,
correct and complete in all material respects; 

     

     

     

     

    
      
        
        

      

      
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    (ii)  The
“Maximum Additional Pre-Closing Under Sec. 11.1(c) of RMT Agr” column of the
Worksheet identifies the maximum number of shares of all classes of RMT
Partner’s capital stock (A) issuable after the date of the RMT Transaction
Agreement but before Closing that are not subject to a risk of forfeiture, (B)
issuable after the date of the RMT Transaction Agreement but before Closing that
are subject to a risk of forfeiture, (C) issuable by RMT Partner upon the
exercise of Options that may be granted after the date of the RMT Transaction
Agreement but before Closing, (D) issuable pursuant to deferred compensation
plans granted after the date of the RMT Transaction Agreement but before Closing
and (E) underlying stock appreciation rights that may be granted after the date
of the RMT Transaction Agreement but before Closing; and

     

    (iii)  Except
as provided in subparagraphs (i) and (ii) above, there exist no other rights,
contracts, grants or obligations of RMT Partner that may result in the issuance
of shares of any class of capital stock of RMT Partner.

     

    (d)  As
of the Distribution Date, RMT Partner represents:

     

    (i)  From
the date of the RMT Transaction Agreement through the Distribution Date, RMT
Partner has issued no capital stock of RMT Partner other than capital stock of
RMT Partner issued pursuant to an Employee Equity Grant;

     

    (ii)  Except
for the Employee Equity Grants that are outstanding as of the Distribution Date,
there exist no other rights, contracts, grants or obligations of RMT Partner
that may result in the issuance of shares of any class of capital stock of RMT
Partner; and

     

    (iii)  All
Employee Equity Grants that have been granted or issued on or before the
Distribution Date (A) have been granted to an employee, director or independent
contractor of RMT Partner or of a “related person” (within the meaning of
Treasury Regulation Section 1.355-7 (d)(8)) of RMT Partner (a “Related Person”))
and the capital stock of RMT Partner issuable pursuant to such Employee Equity
Grants has been, or will be, issued to an employee, director or independent
contractor (or, in each case, to a successor thereto) of RMT Partner or of a
Related Person in connection with such person’s performance of services as an
employee, director or independent contractor of RMT Partner or of a Related
Person, (B) have not been granted and the capital stock of RMT Partner issuable
pursuant to such Employee Equity Grants has not been, or will not be, issued, to
a “controlling shareholder”, a “ten-percent shareholder” or a “coordinating
group” (each within the meaning of Treasury Regulation Section 1.355-7(h)) of
RMT Partner or of a Related Person, (C) are not, or will not be, excessive by
reference to the services performed or to be performed (determined at the time
such Employee Equity Grants were granted and, if applicable, at the time
agreements governing such Employee Equity Grants were amended) and (D) are, or
will be, (or the capital stock of RMT Partner issued or issuable pursuant to
such Employee Equity Grants was, or will be) subject to Section 83 of the
Code

     

     

     

     

    
      
        
        

      

      
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    SECTION
4.02  Covenants.  (a)
Parent shall not take or fail to take, or permit any of its Affiliates to take
or fail to take, any action where that action or failure to take action
(i) violates or causes to be untrue any covenant, Tax Representation or
statement made by Parent in the Tax Opinions or Ruling (including any
Supplemental Tax Opinion or Supplemental Ruling), or a letter or certificate
that forms the basis therefor or (ii) causes the Proposed Transactions to
fail to qualify for the Intended Tax-Free Treatment.

     

    (b)  RMT
Partner and Splitco shall not take or fail to take, or permit any of their
Affiliates to take or fail to take, any action where that action or failure to
take action (i) violates or causes to be untrue any covenant, Tax
Representation or statement made by RMT Partner or Splitco in the Tax Opinions
or Ruling (including any Supplemental Tax Opinion or Supplemental Ruling), or a
letter or certificate that forms the basis therefor, (ii) causes the
Proposed Transactions to fail to qualify for the Intended Tax-Free Treatment or
(iii) is reasonably likely to adversely affect the treatment of the Splitco
Securities as “securities” for U.S. Federal income tax purposes (including the
prepayment or defeasance of the Splitco Securities).

     

    (c)  During
the Restricted Period, RMT Partner and Splitco shall not, and shall not permit
any of their Affiliates to, in a single transaction or in a series of
transactions (such actions described below, together with the actions described
in Section 4.02(b), “Prohibited Acts”),
except as provided in paragraph (d) of this Section 4.02:

     

    (i)  merge
or consolidate Splitco, Merger Sub or RMT Partner with any other person (other
than pursuant to the Mergers);

     

    (ii)  adopt,
modify or amend any employee stock purchase agreement or equity compensation
plan or enter into any negotiations, agreements, understandings or arrangements
as determined for purposes of Code Section 355(e) in connection with
transactions or events that may alone or in the aggregate result in one or more
persons acquiring directly or indirectly any interest in Splitco Capital Stock
(“Planned
Acquisitions”) or issue any stock (or any instrument convertible or
exchangeable into stock), other than pursuant to Employee Equity Grants, that in
the aggregate, together with all Planned Acquisitions, represent a 2% or
greater interest (by vote or value) of Splitco or RMT Partner, as measured
on a cumulative basis from the Distribution Date; provided that for
purposes of this clause (ii), whether a 2% or greater ownership change is
or would be involved in one or more transactions shall be determined under
multiple methods that reflect the differing number of shares of Splitco Capital
Stock outstanding at various times (e.g., on the Distribution Date, immediately
prior to each transaction, etc.) and the method chosen shall be the one that
results in the largest potential ownership change;

     

     

     

     

    
      
        
        

      

      
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    (iii)  liquidate
or partially liquidate Splitco, Merger Sub or RMT Partner (other than in the
case of Splitco and Merger Sub pursuant to the Mergers);

     

    (iv)  cause
or permit RMT Partner, Splitco or Merger Sub, as applicable, to cease to engage
in the Active Trade or Business;

     

    (v)  sell
or transfer all or substantially all of the Acquired Assets;

     

    (vi)  redeem
or otherwise repurchase any shares of RMT Partner in a manner contrary to the
requirements of Revenue Procedure 96-30 (except as provided in the IRS
Ruling) or in any other manner contrary to the Tax Representations made by
Splitco or RMT Partner for the Tax Opinions or Ruling (including any
Supplemental Tax Opinion or Supplemental Ruling); or

     

    (vii)  amend
its certificate of incorporation (or other organizational documents), or take
any other action, affecting the relative voting rights of the separate classes
of Splitco Capital Stock; provided, however, that RMT
Partner’s adoption of a shareholder rights plan that meets the requirements of
IRS Revenue Ruling 90-11 shall be deemed a Prohibited Act for which Parent
has given its prior written consent pursuant to Section 4.02(d).

     

    (d)  Notwithstanding
paragraph (c), RMT Partner, Splitco or Merger Sub may, or may permit an
Affiliate to, engage in a Prohibited Act (i) within the first year
following the Distribution Date, if it receives the prior written consent of
Parent, not to be unreasonably withheld or delayed, or provides Parent with a
Supplemental Ruling and (ii) for the remainder of the Restricted Period, if
it receives the prior written consent of Parent, not to be unreasonably withheld
or delayed, or provides Parent with a Supplemental Ruling or a Supplemental Tax
Opinion.

     

    (e)  All
Employee Equity Grants that will be granted or issued on or after the
Distribution Date (A) will be granted to an employee, director or independent
contractor of RMT Partner or of a Related Person and the capital stock of RMT
Partner issuable pursuant to such Employee Equity Grants will be issued to an
employee, director or independent contractor (or, in each case, to a successor
thereto) of RMT Partner or of a Related Person in connection with such person’s
performance of services as an employee, director or independent contractor of
RMT Partner or of a Related Person, (B) will not be granted and the capital
stock of RMT Partner issuable pursuant to such Employee Equity Grants will not
be issued, to a “controlling shareholder”, a “ten-percent shareholder” or a
“coordinating group” (each within the meaning of Treasury Regulation Section
1.355-7(h)) of RMT Partner or of a Related Person, (C) will not be excessive by
reference to the services performed or to be performed (determined at the time
such Employee Equity Grants were first made and, if applicable, at the time
agreements governing such Employee Equity Grants were amended) and (D) will be
(or the capital stock of RMT Partner issuable pursuant to such Employee Equity
Grants will be) subject to Section 83 of the Code.

     

     

     

     

    
      
        
        

      

      
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    (f)  (a)
Parent hereby consents to issuances of capital stock of RMT Partner pursuant to
the Employee Equity Grants described in Section 4.01(d)(iii) and
Section 4.02(e).

     

    (ii)  Parent
and RMT Partner agree that Parent shall provide its written consent with respect
to issuances of capital stock of RMT Partner pursuant to an employee stock
purchase agreement or equity compensation plan that are not described in
Section 4.01(d)(iii) or Section 4.02(e) that Parent determines in its
reasonable discretion meet the requirements of Safe Harbor VIII or IX of
Treasury Regulation Section 1.355-7(d).

     

    SECTION
4.03  Procedures Regarding
Supplemental Rulings. (a)
Subject to Section 4.02(d), if RMT Partner or Splitco may take certain
actions conditioned upon the receipt of a Supplemental Ruling, Parent, at the
request of RMT Partner or Splitco, shall use commercially reasonable efforts to
expeditiously obtain, or assist RMT Partner or Splitco in obtaining, such
Supplemental Ruling.  Parent shall not be required to take any action
pursuant to this Section 4.03(a) if RMT Partner or Splitco fails to
certify, upon request, that all Tax Representations and warranties made by RMT
Partner or Splitco in any letter or certificate forming the basis of the Tax
Opinions or Ruling (including any Supplemental Tax Opinion or Supplemental
Ruling), relating to the Intended Tax-Free Treatment of the Proposed
Transactions, are true, correct and complete.  RMT Partner and Splitco
shall reimburse Parent for all reasonable out-of-pocket costs and expenses
incurred by Parent in obtaining such Supplemental
Ruling.  Notwithstanding the foregoing, Parent shall not be required
to seek, obtain or assist RMT Partner or Splitco in obtaining a Supplemental
Ruling if Parent, in its sole and absolute discretion, determines that there is
a reasonable possibility that seeking or obtaining such Supplemental Ruling
could have a significant adverse impact on any member of the Parent
Group.

     

    (b)  Parent
shall have exclusive control over the process of obtaining any Supplemental
Ruling and neither RMT Partner nor any of its Affiliates shall independently
seek any guidance concerning the Proposed Transactions from any Taxing
Authority, except to the extent such guidance relates to a Tax Item of RMT
Partner in a Post-Distribution Period.  In connection with any
Supplemental Ruling that can reasonably be expected to affect RMT Partner’s or
the Splitco Group’s liabilities under this Agreement, Parent shall (i) keep
RMT Partner informed of all material actions taken or proposed to be taken by
Parent, (ii) reasonably in advance of the submission of any Supplemental
Ruling request provide RMT Partner with a draft thereof (provided that Parent
may redact from such draft any information that Parent in its good-faith
judgment considers to be confidential and is not publicly available), consider
RMT Partner’s comments on such draft, and provide RMT Partner with a final copy,
and (iii) provide RMT Partner with notice reasonably in advance of, and
permit RMT Partner to attend, any formally scheduled meetings with the IRS
(subject to the approval of the IRS) that relate to such Supplemental
Ruling.

     

     

     

     

    
      
        
        

      

      
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    ARTICLE
V


     

    Tax Contests;
Indemnification; Cooperation

     

    SECTION
5.01  Notice.  (a)
Within 15 days after a party (the “Indemnitee”) becomes
aware of the existence of a Tax Contest that may give rise to an indemnification
claim under this Agreement by it against the other party (the “Indemnifying Party”),
the Indemnitee shall promptly notify the Indemnifying Party of the Tax Contest,
and thereafter shall promptly forward or make available to the Indemnifying
Party copies of notices and communications with a Taxing Authority relating to
such Tax Contest.

     

    (b)  The
Indemnifying Party shall not be responsible for any increase in amounts to which
the Indemnitee is otherwise entitled to the extent that such increase results
solely from the failure of the Indemnitee to provide timely notice as required
pursuant to Section 5.01(a).

     

    SECTION
5.02  Control of Tax
Contests.  (a) Parent may elect to control, and to have sole
discretion in handling, settling or contesting, any Tax Contest relating to
(i) all Tax Returns for which Parent is responsible for preparing and
filing under Section 3.01, (ii) all Transfer Taxes, (iii) all
Transaction Taxes assessed against Parent by the applicable Taxing Authority and
(iv) the tax treatment of the Proposed Transactions (except as provided in
Section 5.02(b)(iii)) and the Non-U.S. Transfer; provided, however, that
(x) Parent shall act in good faith in connection with its control of any
such Tax Contests for which RMT Partner and Splitco may be required to indemnify
Parent pursuant to this Agreement and keep RMT Partner and Splitco informed in a
timely manner of all actions taken or proposed to be taken and timely provide
RMT Partner and Splitco with copies of all correspondence and filings in
connection therewith, (y) RMT Partner and Splitco shall have the right, at
their own expense, to participate in (including the opportunity to review and
provide reasonable comments on Parent’s communications with the Taxing
Authority, which comments shall be incorporated upon the consent of Parent, not
to be unreasonably withheld) and advise on (including with respect to strategy
for any settlement decisions) any such Tax Contests for which RMT Partner or
Splitco may be required to indemnify Parent pursuant to this Agreement and
(z) with respect to any such Tax Contest for which RMT Partner or Splitco
would be required to indemnify Parent pursuant to this Agreement, Parent shall
not settle or concede such Tax Contest without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably
withheld;

     

    (b)   RMT
Partner and Splitco may elect to control, and to have sole discretion in
handling, settling or contesting, any Tax Contest relating to (i) all Tax
Returns for which RMT or Splitco is responsible for preparing and filing under
Section 3.02, (ii) all Transaction Taxes assessed against RMT Partner or Splitco
by the applicable Taxing Authority, (iii) the tax treatment of the Mergers, if
(x) RMT Partner confirms in writing to Parent that RMT Partner is responsible
for Taxes resulting from such Tax Contests pursuant to Section 2.02(b) and (y)
such Tax Contest does not involve any other Tax Detriment for which Parent is
required to indemnify RMT Parent and (iv) all Recoverable Taxes; provided, however, that
(x) RMT Partner and Splitco shall act in good faith in connection with its
control of any such Tax Contests for which Parent may be required to indemnify
RMT Partner or Splitco pursuant to this Agreement and keep Parent informed in a
timely manner of all actions taken or proposed to be taken and timely provide
Parent with copies of all correspondence and filings in connection therewith,
(y) Parent shall have the right, at its own expense, to participate in
(including the opportunity to review and provide reasonable comments on RMT
Partner and Splitco’s communications with the Taxing Authority, which comments
shall be incorporated upon the consent of RMT Partner and Splitco, not to be
unreasonably withheld) and advise on (including with respect to strategy for any
settlement decisions) any such Tax Contests for which Parent may be required to
indemnify RMT Partner or Splitco pursuant to this Agreement and (z) with respect
to any such Tax Contest for which Parent would be required to indemnify RMT
Partner or Splitco pursuant to this Agreement, RMT Partner or Splitco shall not
settle or concede such Tax Contest without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld;
and

     

     

     

     

    
      
        
        

      

      
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    (c)  Any
out-of-pocket costs incurred in handling, settling or contesting a Tax Contest
(other than costs that constitute an element of Transaction Taxes) shall be
borne ratably by the parties based on their ultimate liability under this
Agreement for the Taxes to which the Tax Contest relates.

     

    SECTION
5.03  Indemnification
Payments.  (a) An Indemnitee shall be entitled to make a claim
for payment pursuant to this Agreement when the Indemnitee determines that it is
entitled to such payment and the amount of such payment (including, for the
avoidance of doubt, the finalization of a Return before filing).  The
Indemnitee shall provide to the Indemnifying Party notice of such claim within
10 days of the date on which it first so becomes entitled to claim such
payment, including a description of such claim and a detailed calculation of the
amount of the indemnification payment that is claimed, provided, however, that no
delay on the part of the Indemnitee in notifying the Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party is actually and materially
prejudiced thereby.  Except as provided in paragraph (b), the
Indemnifying Party shall make the claimed payment to the Indemnitee within
10 days after receiving such notice, unless the Indemnifying Party
reasonably disputes its liability for, or the amount of, such
payment.

     

    (b)  If
the Indemnitee shall be obligated to make the payment described in paragraph
(a) to a Taxing Authority or other third party (including expenses
reimbursable under this Agreement), the Indemnifying Party shall not be
obligated to pay the Indemnitee more than 5 days before the Indemnitee
incurs such expense or makes such payment.  If the Indemnitee’s claim
for payment arises from a payment that the Indemnifying Party will receive from
a third party, such as a refund, the Indemnifying Party shall not be obligated
to pay the Indemnitee until 5 days after the Indemnifying Party receives
such payment.

     

     

     

     

    
      
        
        

      

      
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    SECTION
5.04  Interest on Late
Payments.  Interest shall accrue with respect to any
indemnification payment (including any disputed payment that is ultimately
required to be made), not made within the period for payment, at [the prime rate
(as published in the Wall
Street Journal, Northeastern Edition) in effect on the Closing Date,
which interest shall be calculated on the basis of a 365-day year and the actual
number of days elapsed.

     

    SECTION
5.05  Treatment of
Payments.  The amount of all indemnification obligations under
this Agreement shall be net of any Tax Benefit to the Indemnitee or its
Affiliates arising from the incurrence or payment of any such indemnity
payments.

     

    SECTION
5.06  Expenses.  Except
as otherwise provided herein, each party shall bear their own expenses incurred
in connection with preparation of Tax Returns, Tax Contests, and other matters
under this Agreement.

     

    SECTION
5.07  Cooperation.  Parent,
on the one hand, and RMT Partner and Splitco, on the other hand, shall cooperate
fully with all reasonable requests from the other party in connection with the
preparation and filing of Tax Returns, Tax Contests and other matters covered by
this Agreement.

     

    (a)  Such
cooperation shall include:

     

    (i)  the
retention until the expiration of the applicable statute of limitations, and the
provision upon reasonable request, of copies of Tax Returns and relevant
portions of books and records relating to Splitco’s tax basis in the Acquired
Assets;

     

    (ii)  the
execution of any document that may be necessary or reasonably helpful in
connection with any Tax Contest or the filing of a Tax Return by a member of the
Parent Group or the Splitco Group, obtaining a private letter ruling (except as
otherwise provided in Section 4.02(d)), or other matters covered by this
Agreement, including certification (provided in such form as may be required by
applicable law or reasonably requested and made to the best of a party’s
knowledge) of the accuracy and completeness of the information it has
supplied;

     

    (iii)  the
use of the parties’ reasonable best efforts to obtain any documentation that may
be necessary or reasonably helpful in connection with any of the foregoing,
including providing copies of any relevant portions of tax books and records
relating to Splitco's basis in the Acquired Assets, provided, however, that neither
RMT Partner nor Splitco shall have the right to review or receive a copy the
Parent Group Federal Consolidated Return; and

     

    (iv)  the
use of the parties’ reasonable best efforts to make the applicable party’s
current or former directors, officers, employees, agents and facilities
available on a reasonable and mutually convenient basis in connection with the
foregoing matters.

     

     

     

     

    
      
        
        

      

      
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    (b)  If
a party fails to comply with any of its obligations set forth in this
Section 5.07 upon reasonable request and notice by the other party, and
such failure results in the imposition of additional Taxes, the nonperforming
party shall be liable in full for such additional Taxes.

     

    SECTION
5.08  Confidentiality.  Any
information or documents provided under this Agreement shall be kept
confidential by the recipient-party, except as may otherwise be necessary in
connection with the filing of Tax Returns or with any Tax Contest.  In
addition, if Parent or Splitco determines that providing such information could
be commercially detrimental, violate any law or agreement or waive any
privilege, the parties shall use reasonable best efforts to permit compliance
with the obligations under this Agreement in a manner that avoids any such harm
or consequence.

     

    SECTION
5.09  Retention of Tax
Records.  If either Parent or Splitco intends to dispose of
documentation with respect to any Pre-Distribution Period, including books,
records, Tax Returns and all supporting schedules and information relating
thereto (after the expiration of the applicable statute of limitations), of any
member of the other Group, they shall provide written notice to the other party
describing the documentation to be disposed of 30 days prior to taking such
action.  The other party may arrange to take delivery of the
documentation described in the notice at its own expense during the succeeding
30-day period.

     

     

    ARTICLE
VI


    Resolution of
Disputes

     

    SECTION
6.01  TAA
Disputes.  The parties shall endeavor, and shall cause their
respective Affiliates to endeavor, to resolve in an amicable manner all disputes
arising in connection with this Agreement.  The parties shall
negotiate in good faith to resolve any TAA Dispute for not less than
45 days.  Upon written notice of either party after 45 days,
the matter will be referred to a Tax Advisor acceptable to both
parties.  The Tax Advisor may, in its discretion, obtain the services
of any third-party necessary to assist it in resolving the
dispute.  The Tax Advisor shall furnish written notice to the parties
of its resolution of the dispute as soon as practicable, but in any event no
later than 45 days after its acceptance of the matter for
resolution.  Any such resolution by the Tax Advisor shall be binding
on the parties and the parties shall take, or cause to be taken, any action
necessary to implement the resolution.  All fees and expenses of the
Tax Advisor shall be shared equally by the Parent Group, on the one hand, and
the Splitco Group, on the other hand.  If, having determined that the
dispute must be referred to a Tax Advisor, after 45 days the parties are
unable to find a Tax Advisor willing to adjudicate the dispute in question and
whom the parties in good faith find acceptable, then the dispute shall be
submitted for arbitration to the American Arbitration Association, provided, however, that only an
arbitrator that qualifies as a Tax Advisor shall be selected.

     

     

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    ARTICLE
VII


     

    Miscellaneous
Provisions

     

    SECTION
7.01  Notice.  Any
payments, notices, requests, claims, demands and other communications under this
Agreement shall be provided in accordance with the Notice provision of the RMT
Transaction Agreement.  In addition, copies of all documents mentioned
in the preceding sentence shall also be sent to the address and party set forth
below (or at such other address as one party may specify by notice to the other
party):

     

    
      	
              If to
      Parent:

            
	
              Kraft
      Foods Inc.

            
	
              Three
      Lakes Drive

            
	
              Northfield,
      IL 60093

            
	
              Attention:
      Marc Zeman

            
	
              Facsimile:
      (570) 472-6134

            
	 
      
	
              with
      a copy to:

            
	 
      
	
              Stephen
      L. Gordon, Esq.

            
	
              Cravath,
      Swaine & Moore LLP

              825
      Eighth Avenue

              New
      York, NY 10019

            
	
              Facsimile:
      (212) 474-3700

            


    

    


    
      	
              If to RMT
      Partner:

            
	
              Ralcorp
      Holdings, Inc.

            
	
              800
      Market Street, Suite 2900

            
	
              St.
      Louis, MO 63101

            
	
              Attention:
      Charles G. Huber, Jr.

            
	
              Facsimile:
      (314) 552-8450

            
	 
      
	
              with
      a copy to:

            
	 
      
	
              Philip
      B. Wright, Esq.

            
	
              Bryan
      Cave LLP

            
	
              One
      Metropolitan Square

              211
      North Broadway

              Suite
      3600

              St.
      Louis, MO 63102

            
	
              Facsimile:
      (314) 552-8499

            


    

    


    Notification
of a change of address shall be given by either party to the other as provided
in this Section 7.01.  All such notices and communications shall
be effective (i) when received, if mailed or delivered, or (ii) when
confirmed by fax answerback, if faxed.

     

     

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    SECTION
7.02  Severability.  If
any provision of this Agreement is determined to be invalid, illegal or
unenforceable, the remaining provisions of this Agreement will remain in full
force, as long as the essential terms and conditions of this Agreement for each
party remain valid, binding and enforceable.

     

    SECTION
7.03  Integration;
Amendments.  Except as explicitly stated herein, this Agreement
embodies the entire understanding between the parties relating to its subject
matter and supersedes and terminates all prior agreements and understandings
among the parties with respect to such matters.  No promises,
covenants or representations of any kind, other than those expressly stated
herein, have been made to induce any party to enter into this
Agreement.  This Agreement shall not be modified or terminated except
by a writing duly signed by each of the parties hereto, and no waiver of any
provisions of this Agreement shall be effective unless in a writing duly signed
by the party sought to be bound.  If, and to the extent, the
provisions of this Agreement conflict with the RMT Transaction Agreement,
or any other Collateral Agreement, the provisions of this Agreement shall
control.

     

    SECTION
7.04  Interpretation.  When
a reference is made in this Agreement to a Section, such reference shall be to a
Section of this Agreement unless otherwise indicated.  The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.  Whenever
the words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without
limitation”.  This Agreement is intended to calculate, allocate and
assign certain Tax responsibilities, liabilities and benefits among the parties
to this Agreement, and any situation or circumstance concerning such
calculation, allocation and assignment that is not specifically contemplated
hereby or provided for herein shall be determined in a manner consistent with
the underlying principles of calculation, allocation and assignment in this
Agreement.

     

    SECTION
7.05  Construction.  The
language of this Agreement shall be construed according to its fair meaning and
shall not be strictly construed for or against any
party.  Notwithstanding the foregoing, the purposes of Article IV
are to ensure the Intended Tax-Free Treatment and, accordingly, the parties
agree that the language thereof shall be interpreted in a manner that serves
this purpose to the greatest extent possible.  

     

    SECTION
7.06  Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same.

     

    SECTION
7.07  Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State, without regard to the conflicts
of law principles of such State.

     

    SECTION
7.08  Actions and
Proceedings.  Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any federal court located in the
State of Delaware or the Delaware Chancery Court in the event any dispute arises
out of this Agreement or any of the transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and
(c) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of Delaware or the Delaware Chancery
Court.  Each of the parties hereto irrevocably consents to the service
of any summons and complaint and any other process in any other action relating
to the transactions contemplated by this Agreement, on behalf of itself or its
property, by the personal delivery of copies of such process to such
party.  Nothing in this Section 7.08 shall affect the right of
any party hereto to serve legal process in any other manner permitted by
law.

     

     

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    SECTION
7.09  Waiver
of Jury Trial.  Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect
of any dispute arising out of this Agreement.

     

    SECTION
7.10  Successors and
Assigns.  Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other party; provided, however, that no such
consent shall be required in the event of a merger or consolidation of Parent,
Splitco or RMT Partner.  Subject to the preceding sentence, this
Agreement shall be binding on, and shall inure to the benefit of, and be
enforceable by, the parties hereto and their respective successors and
assigns.

     

    SECTION
7.11  Injunctions.  The
parties acknowledge that irreparable damage would occur to Parent in the event
that any of the provisions of this Agreement were not performed in accordance
with its specific terms or were otherwise breached.  The parties agree
that Parent shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof in any court having jurisdiction, such remedy being
in addition to any other remedy to which it may be entitled at law or in
equity.  Nothing in this Agreement (including Article VI) will
prevent any party from seeking injunctive relief as it deems necessary or
appropriate.

     

    SECTION
7.12  Survival.  Except
with respect to Sections 5.07, 5.08 and 5.09 which shall remain in
effect without limitation as to time, the provisions in this Agreement shall be
unconditional and absolute and shall remain in effect until the expiration of
the statute of limitations for all taxable periods that end before or include
December 31 of the calendar year in which the Distribution occurs and the
resolution of all disputes under this Agreement that arose during such
periods.

     

    [Signature
page follows]

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

     

     

     

     

     

    IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by the
respective officers as of the date set forth above.

     

    


     

    
      	 	KRAFT FOODS
    INC.
	 	 	 
	 	By:  	/s/ Dexter P.
      Congbalay
	 	Name:	     
      Dexter P. Congbalay
	 	Title:	      Authorized
      Officer


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    [Signature Page to Tax Allocation Agreement]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

     

     

     

     

     

    
      	 	 CABLE HOLDCO, INC.
	 	 	 
	 	By:	 /s/ Talita
      Ramos
	 	Name:	      
      Talita Ramos
	 	Title:	       Assistant
      Secretary


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    [Signature Page to Tax Allocation Agreement]

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

     

     

     

     

     

     

    
      	 	 RALCORP HOLDINGS,
      INC.
	 	 	 
	 	By: 	 /s/  S.
      Monette
	 	Name:	       
      S. Monette
	 	Title:         	       
      Corporate Vice President and Treasurer


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    [Signature Page to Tax Allocation Agreement]